INTERNATIONAL
Bilateral Relations
India and Japan Extend USD 75 Billion Currency Swap Arrangement
The Reserve Bank of India and the Bank of Japan have renewed their Bilateral Swap Arrangement (BSA), maintaining the facility size at USD 75 billion.
The third amendment to the agreement, effective from February 28, 2026, allows both nations to swap local currencies for the US Dollar to maintain financial stability.
Originally established in October 2018, this framework serves as a vital safety net against short-term liquidity challenges.
Significance: This extension underscores the deep-rooted financial cooperation between the two largest Asian economies and ensures a buffer against global market volatility.
The third amendment to the agreement, effective from February 28, 2026, allows both nations to swap local currencies for the US Dollar to maintain financial stability.
Originally established in October 2018, this framework serves as a vital safety net against short-term liquidity challenges.
Significance: This extension underscores the deep-rooted financial cooperation between the two largest Asian economies and ensures a buffer against global market volatility.
Key Facts / Static GK
Bank of Japan Governor: Kazuo Ueda
RBI Headquarters: Mumbai
BSA Original Signing Year: 2018
First Restatement: 2022
RBI Headquarters: Mumbai
BSA Original Signing Year: 2018
First Restatement: 2022
Practice Quiz — 5 March 2026
Q1. Which of the following statements regarding the new Risk-Based Premium (RBP) framework is incorrect?
Answer: (C) The framework introduces a uniform risk-based incentive of 50% for all high-performing banks. — Statement C is incorrect because the maximum risk-based incentive is capped at 33.33%, not 50%. Additionally, a vintage incentive of up to 25% is provided for long-term distress-free contributions.
Q2. Under the new SEBI framework, what is the revised minimum equity allocation required for Dividend Yield and Value funds?
Answer: (D) 80% — SEBI has increased the minimum equity allocation for Dividend Yield Funds, Value Funds, and Contra Funds to 80%, compared to the earlier requirement of 65%.
Q3. What is the primary objective of the Bilateral Swap Arrangement (BSA) between India and Japan?
Answer: (B) To provide a financial safety net and enhance bilateral financial cooperation. — The BSA is a two-way currency swap framework designed to strengthen financial safety nets, promote regional/global stability, and enhance bilateral financial cooperation by allowing local currency exchange for US Dollars during liquidity stress.
Q4. The LKR 3 billion Blue Bond issued by DFCC Bank Plc will primarily fund which of the following activities?
Answer: (B) Sustainable fisheries and marine conservation projects. — Blue Bonds are specialized financial instruments designed to fund marine conservation, sustainable fisheries, ocean-based economic development, and clean water projects.
Q5. Regarding the Delhi Lakhpati Bitiya Yojana, which of the following eligibility criteria is mentioned?
Answer: (D) The benefit is limited to a maximum of two living girl children per family. — According to the scheme details, it is limited to two living girl children per family. Other criteria include an income limit of Rs 1.20 lakh, being born in Delhi, and a minimum of three years of residence in Delhi.
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